Public Sector Financing Solution

Treasury Administration Services

SA Government treasury administration services are only available to South Australian public sector agencies, within the confines of the Government Financing Authority Act 1982, and applicable approvals of the Treasurer of South Australia.

SAFA can provide a wide range of administration services relating to treasury and financial transactions, including:

Transaction management

Reporting

Settlements

Accounting

In addition to offering individual services, SAFA can provide a complete treasury outsourcing service. SAFA can manage client portfolios and associated treasury operations in line with policies approved by the client's management or Board.

Leasing

SAFA, in conjunction with the Department of Treasury and Finance, has developed Leasing Guidelines to assist governmental agencies in leasing decisions.

The leasing guidelines apply to agencies contemplating procurement via a leasing arrangement where the cost of the asset or group of assets to be acquired and/or the present value of the proposed lease payments exceeds $100,000.

SA Government Loans

South Australian Government Loan Products and Services are available only to South Australian public sector agencies, within the confines of the Government Financing Authority Act 1982, and applicable approvals from the Treasurer of South Australia.

SAFA Client Services staff are available to provide advice regarding these products, in order to fulfil clients' individual borrowing requirements.

The SAFA Overdraft Facility is a liquid account with funds available same day. The aim of the SAFA Overdraft facility is to provide approved South Australian public sector agencies with a short term borrowing facility at competitive rates.

Short-term loans are suitable for agencies who wish to borrow a set amount of funds for a known period, with the rate for the entire period known up front. Interest is calculated at the quoted fixed rate for the term of the loan and is typically paid at maturity, although more frequent payments can be made if required. The early repayment of a short-term loan will be calculated at prevailing market rates and may result in a break cost or gain to the client.

Longer-term loans can be negotiated on an interest only basis, and are suitable for agencies who wish to borrow a set amount of funds for a known period, and make interest payments during the term of the loan, with the principal amount repaid at maturity. Clients may choose how frequently they wish to pay the interest, and the loan can be negotiated as a fixed rate for the term of the loan or as a floating rate which varies according to prevailing market rates.

Credit foncier loans are suitable for clients who wish to borrow funds for a known period of time, and make repayments of principal and interest during the term of the loan. Clients may choose how frequently they wish to make their repayments, and the loan can be negotiated as a fixed rate for the term of the loan or as a floating rate which varies according to prevailing market rates.

Investment

South Australian Government Investment Products and Services are available only to South Australian public sector agencies, within the confines of the Government Financing Authority Act 1982, and applicable approvals from the Treasurer of South Australia.

SAFA can accept deposits and offer investment products to clients within the South Australian public sector under the Government Financing Authority Act 1982 and with the approval of the Treasurer of South Australia.

SAFA Client Services staff are available to provide advice regarding these products, in order to fulfil clients' individual investment requirements.

The At Call Deposit facility is a liquid cash account with funds available same day and provides a competitive return for short term cash surpluses. At Call Deposits are capital guaranteed with interest based on SAFA's overnight deposit rate and applied to the daily balance of the funds on deposit. Interest is accrued daily and payable on the first day of the following month.

Term deposits are suitable for government clients who wish to nominate the term of their investment with the rate for the entire period known up front. Interest is calculated at the quoted fixed rate for the term of the deposit and is typically paid at maturity, although more frequent payments can be made if required. The early termination of a term deposit will be calculated at prevailing market rates and may result in a break cost or gain to the client.

Portfolio Management

Portfolio management services are only available to South Australian public sector agencies, within the confines of the Government Financing Authority Act 1982, and applicable approvals of the Treasurer of South Australia.

SAFA can provide a comprehensive portfolio management service for clients with borrowings or investments. We can manage a client portfolio in accordance with the policies approved by the client's management or Board.

In addition to managing the portfolio, SAFA can provide a comprehensive reporting and accounting service for the portfolio.

Foreign Exchange Hedging

The Treasurer of South Australia has issued instructions with regard to agencies managing their foreign exchange exposures (Treasurer's Instruction 23 - Management of Foreign Currency Exposures).

All public authorities as defined by the Public Finance and Audit Act 1987 are required to comply with the instruction, unless an exemption is obtained from the Treasurer.

SAFA assists agencies to assess their foreign currency exposures and implement an appropriate strategy to manage the exposure.

SA Government Interest rate derivative products and services are only available to South Australian public sector agencies, within the confines of the Government Financing Authority Act 1982, and applicable approvals of the Treasurer of South Australia.

SAFA offers a range of interest rate derivative products to assist agencies in managing their interest rate exposure. Agencies will require the Treasurer's approval before entering into derivative products.

Interest Rate Swaps

Interest rate swaps allow agencies to change the nature of their interest rate obligations by swapping them into fixed rates or floating rates with a different frequency.

Interest Rate Futures

Interest rate futures allow agencies to hedge interest rates for periods from one month to a number of years. Australian dollar interest rate futures contacts are traded on the Australian Securities Exchange (ASX).

Forward Rate Agreements (FRA)

A FRA allows agencies to hedge short-term interest rates, similar to interest rate futures. They have greater flexibility in terms of the dates that the hedge is required and the face value of the FRA.

Interest Rate Options

SA Government Interest rate derivative products and services are only available to South Australian public sector agencies, within the confines of the Government Financing Authority Act 1982, and applicable approvals of the Treasurer of South Australia.

SAFA offers a range of interest rate derivative products to assist agencies in managing their interest rate exposure. Agencies will require the Treasurer's approval before entering into derivative products.

Interest Rate Swaps

Interest rate swaps allow agencies to change the nature of their interest rate obligations by swapping them into fixed rates or floating rates with a different frequency.

Interest Rate Futures

Interest rate futures allow agencies to hedge interest rates for periods from one month to a number of years. Australian dollar interest rate futures contacts are traded on the Australian Securities Exchange (ASX).

Forward Rate Agreements (FRA)

A FRA allows agencies to hedge short-term interest rates, similar to interest rate futures. They have greater flexibility in terms of the dates that the hedge is required and the face value of the FRA.

Interest Rate Options

Interest rate options can be purchased to protect Clients against adverse movements in interest rates. They can be tailored to protect a short period of time or a longer period of time. In exchange for the protection, the Client is required to pay an upfront premium.

Financial Advisory Services

SA Government financial advisory services are available only to South Australian public sector agencies, within the confines of the Government Financing Authority Act 1982, and applicable approvals from the Treasurer of South Australia.

SAFA staff are available to provide an advisory role to government clients across a wide range of financial management issues, including:

Liability management

Investment management and asset allocation

Operating and finance leases

Treasury accounting

Portfolio risk reporting

Treasury policy

Structured financing

SAFA has participated in a number of government-wide projects requiring expertise in financial management and risk analysis.

Government Guarantee Fees

On behalf of the Treasurer of South Australia, SAFA is responsible for administering the Government Guarantee Fees applicable to Government Guarantee Fee paying agencies. The application of guarantee fees is consistent with the competitive neutrality principles contained in the Inter-Governmental Agreement between the State and Commonwealth Governments and supports transparency and accountability by ensuring relevant decisions are made reflecting true borrowing costs.

Government Guarantee Fee rates are determined yearly based on credit margins in the Australian financial markets. The credit margins reflect the difference in borrowing costs of the various agencies to the borrowing costs of the South Australian Government.

Government Guarantee Fee rates are payable by agencies to the Treasurer, in addition to borrowing costs, and reflect the advantage provided to them by the Government’s guarantee on debt.

The applicable rates and the pricing policy are contained in the following documents.